06 May Stearns Mortgage Review
Perfect for first-time borrowers and borrowers in search of jumbo loans, Stearns Mortgage is a lending company based out in Texas. The lender is operational in all states except New York, Massachusetts, and Arizona and was founded in 1989. It offers a digital application process and a wide range of financial products, ranging from VA home loans to USDA loans.
About Stearns
Except for home equity lines of credit, you can find almost everything with Stearns. It provides conventional mortgages, renovation loans, jumbo loans, USDA loans, VA mortgages, adjustable-rate, and fixed-rate mortgages.
The lender also offers refinancing options to help you qualify for even lower interest rates.
When it comes to ease of application, Stearns offers a fully online digital experience through its user-friendly mobile app and website. The lender, however, does not provide online rates, thus making it quite difficult for applicants to prequalify.
To get a quote, you would have to get in touch with a local branch. There is also no information posted online regarding the fees.
Stearns Home Loan Types and Rates
As stated above, Stearns lending does not offer much transparency regarding loan rates and fees. You would have to contact the company directly to receive a personal quote.
Regardless, here are some of the most popular mortgage types sold by the lender to qualifying applicants.
Conventional Home Loan
Perfect for those with a good credit score, conventional Stearns home loans allow you to make a downpayment as low as 3%. However, if you choose to pay at least 20% down, you won’t be required to pay Private Mortgage Insurance anymore.
Under conventional loans, if you choose a fixed-rate mortgage, the interest rate would stay constant throughout the loan term. The loan term, in this case, can go up to 30 years, with a minimum loan term of 10 years.
In the case of an ARM (adjustable-rate mortgage), the rates would be lower for the first few years and then would increase after a specific period of time. This option is recommended for those not planning to stay in the house for a more extended period.
USDA Loan
If you are looking to purchase a brand-new property in the countryside, a United States Department of Agriculture (USDA) loan by Stearns might be perfect for you. The lender can even approve a loan for properties located near cities.
These loans do not require you to make a downpayment and come with lower monthly installments. The option offered by Stearns is a fixed-rate 30-year mortgage, given you meet all the property and income requirements.
VA Loan
Initiated especially for military members, Veterans, and family members, VA home loans are mortgages guaranteed by the US Department of Veterans Affairs (VA). The loans come with no downpayment and PMI requirements, lower interest rates, flexible guidelines, and easy eligibility criteria.
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Related Article: What is IRRRL? Is This VA Loan Right For You?
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The lender offers two options- an adjustable-rate mortgage and a fixed-rate mortgage with a loan term of up to 30-years.
FHA Loan
The Federal Housing Administration (FHA) loan allows you to make a downpayment of as little as 3.5%. Moreover, these loans are perfect for first-time borrowers who are looking for lenient credit requirements and easy eligibility criteria.
The options offered are ARM and fixed-rate mortgage with a loan term of up to 30 years.
FHA 203(k)
FHA 203(k) is the ultimate home makeover loan that allows you to make the following renovations-
- Remodeling and structural alterations
- Floor covering and appliances
- Energy conversation enhancements
- Roof replacement and plumbing systems
- Modification for a disabled person
- Lead-based paint
The minimum loan amount offered is $5,000. Besides home improvement, the loan also allows you to include about six months of loan installments while you are living somewhere else due to renovations.
Adjustable-Rate Mortgage
According to industrial statistics, 90% of homeowners don’t stay in the same house for more than nine years. If this case seems familiar, you can opt for an ARM that would include a changing interest rate. The rate would remain slightly lower and constant for the first few years and then change according to the market conditions.
You can get a fixed rate for up to ten years under this loan type. The lender offers 3/1, 5/1, 7/1, and 10/1 ARM.
Jumbo Mortgage
Looking to buy a high-end property in areas like LA, Chicago, or San Francisco? Jumbo mortgages by Stearns might be a wise choice. The loan allows you to finance a house that is more than the conforming limits set by the state.
These loans are available under both- a fixed-rate mortgage and an adjustable-rate mortgage.
Financial Assistance Programs
Under the financial assistance programs, Stearns offers additional perks like downpayment assistance in many states. This program is initiated especially for first-time borrowers who need help with the loan specifications.
You can contact the lender to know if your state offers downpayment assistance.
Renovation Loan
Under renovation loans, the lender offers the following loan types-
- FHA 203k Limited, which allows upgrades like roof replacement, exterior/interior painting, window/door replacement, etc. The minimum loan limit starts from $5,000 and can go up to $35,000.
- Standard 203k, which allows renovations over $35,000.
- FNMA HomeStyle®, which allows high-end upgrades like building a swimming pool or driveway replacement.
Related Article: Can Veterans Build a New Home With a Va Construction Loan?
Stearns Pros and Cons
Here are some perks and downsides of Stearns Mortgages-
Pros of Stearns-
- The lender offers a wide selection of loans, ranging from several renovation loans and government-backed loans that require a no-to-low downpayment.
- The lender offers an interactive mobile app with noteworthy features.
Cons of Stearns-
- The lender does not offer home equity lines of credit.
- The website does not list Stearns mortgage rates and fees online.
Stearns Application Process
With Stearns, you can purchase your first home with seven easy steps.
- To get started, you must get in touch with the company through Mortgage Loan Originators (MLOs).
- After getting an idea of loan terms, downpayment, and interest rates, you must submit your documents for preapproval.
- After getting an idea of how much you can afford, you can go house hunting. An appraisal will also occur to estimate the actual worth of the property.
- If the loan appraiser approves the property, your application will move forward for underwriting. This can take place either online or in person.
- The next step would be to verify all the details provided by you, including income details and employment information.
- After verification, the next step is underwriting. To ensure that your loan closes faster than usual, the lender only takes 48 hours for underwriting.
- The last step, i.e., loan closing takes only 14 days with Stearns. However, it can differ depending upon several other factors.
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Related Article: How Do I Get a Va Certificate of Eligibility?
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Stearns Refinancing
Stearns offers a variety of refinancing options, ranging from VA IRRRL to an FHA 203 (k) rehabilitation loan. These loans can help you reduce your monthly installments, shorten your loan term or renovate your home.
You can go through various refinancing options by clicking here.
Stearns Alternatives
While Stearns is an excellent option for purchasing your first home, you can always go for its alternatives if this option doesn’t feel right.
Here are some of the other options-
Freedom Mortgage
Unlike Stearns, Freedom Mortgage offers home equity lines of credit and has approximately 100 brick-to-mortar branches all over the US. The lender, however, does not entertain online applications.
Fairway Independent Mortgage
Offering digital application features and a huge variety of renovation loans, Fairway Independent Mortgage is headquartered in Texas. Founded in 1996, the lender provides everything from VA loans to conventional ARMs.
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Related Article: What Is the Native American Direct Loan (nadl)Program?
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Stearns Transparency
Stearns lending mortgage rates have less to offer when it comes to rates transparency. Due to the lack of rates stated online, the applicants can hardly apply for preapproval, making it slightly challenging to get an idea of how much they can afford.
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